Plugging the gap

When summer rolls into China, melted snow runs down from the mountains, rainstorms ride in on monsoon winds and the rivers rise.

This is what led to the southwestern city of Chongqing experiencing its worst floods in 115 years last month. Between July 16 and July 18, the municipality received 266.6 millimeters of rain and the flooding took 37 lives. The authorities said 19,600 homes were destroyed.

Overall economic losses were put at around US$331 million – and this in an area that, last summer, was hit by its worst drought in over a century.

Such are the costs of climate change.

A report on the subject published by the Netherlands Environmental Assessment Agency (NEAA) on June 20 claimed that China overtook the US to become the world’s leading carbon dioxide emitter in 2006. It was just the latest in a series of international studies on the growing risks of reduced rainfall, water scarcity, heat waves and floods in Asia.

Beijing rejected the NEAA report as biased, but its sentiments did not go unnoticed. Premier Wen Jiabao has warned that abnormal weather conditions could see this year’s grain output fall after three consecutive years of bumper harvest.

Critical findings

China is ramping up projects with global partners to try and balance its voracious development needs with an ecosystem that is increasingly under siege. In Holland, it seems to have found a partner that can offer both environmental projects and help to fuel its growth.

Earlier this year, China’s Vice Premier Hui Liangyu inked an agreement with Dutch environmental institute Alterra, a research institute that focuses on the sustainable use of rural areas. Under the agreement, Alterra will develop an early-warning system for droughts in addition to cooperating with China in water management and flood deference.

Since the beginning of 1996, the company has worked on about 17 projects in China, with four or five currently in operation. They include large-scale wastewater and heavy metals management as well as polluted soil projects in the Yellow and Yangtze River basins.

“In China, the Ministry of Water Resources is responsible for monitoring water quantity while the State Environmental Protection Agency oversees water quality,” Zhang Tiehan, the China representative for Alterra said.

“At present, I don’t believe that we lack the ability to manage our water. We aim to facilitate communication and exchange between different government bureaus to create an administrative structure to do it more effectively.”

The Alterra deal is part of a larger, EU-funded project involving groups from the UK, Denmark and Sweden. The aim is to introduce European standards of water resource management into China.

“The EU has high standards of water management and lots of experience,” Zhang added.

Long-term problems

For thousands of years, floods have been one of the defining banes of Chinese existence.

In 250 BC, the governor of the Shu prefecture of the Qin state, Li Bing, diverted the overflowing Minjiang River that wrought havoc among residents downstream by building Sichuan’s Dujiangyan Irrigation Project. It was considered a masterpiece of hydraulic engineering and provided power and irrigation to the land for over 2,000 years.

Today, China’s ecosystem is threatened by rapid urbanization and a lack of political will to enforce environmental protection to preserve its increasingly fragile ecosystem. Hence the need to bring in foreign expertise.

With 25% of Holland’s landmass below sea level and two-thirds of it vulnerable to flooding, the country has a long-standing reputation for water management and flood deference. Engineering consultancy DHV has established itself as one of the major players in the field and first branched out into China as early as the 1970s. It works on public and private sector projects, promoting its own technologies for waste-water management and pollution reduction.

Citing China’s rapid economic development and consumption of natural resources, DHV Vice-Director Ryan Yao believes the company does much to help tackle an increasingly serious problem.

“Government policies for environmental protection are very supportive now and there are lots of areas to develop,” he said. “In terms of pollution and water management, Holland not only has technical know-how; they also have lots of experience with legal systems and implementation. We are putting all this into our industrial projects in China.”

Targeted development

In 2005, in-line with China’s “Go West” initiative to promote prosperity in its poorer regions, DHV invested US$55 million provided by the Dutch Government to launch their Feasible Technologies for Environmental Infrastructure into smaller western Chinese cities. This two-year program entails the design and construction of six wastewater treatment plants, three solid waste processing installations and one drinking water station in Sichuan, Chongqing and Yunnan.

The ultimate goal is that theses pilot sites will serve as models from which neighboring cities can learn.

“This project has an educational motive,” Yao said. “We want to teach these small cities and towns how to take care of their own environment. Many of [these] sites have already [begun operations] and the results, so far, are quite good.”

In 2006, international and domestic firms began clamoring at the gates when China passed their Renewable Energy Act, mandating that the nation switch 10% of its power generating capacity to renewable energy by 2020.

Although Germany, Denmark and Spain have taken the lion’s share of projects in China to date, Royal Dutch Shell is now stepping into the fray.

Working in partnership with China National Offshore Oil Corporation, Shell has built the Nanhai Petrochemical Plant on the South China Sea coast near Shenzhen. In addition to attracting large investments from downstream chemical companies, the plant won praise in China for introducing energy reductions to petrochemical processing.

It was also credited with heightening environmental awareness in the industry through its efforts in rain-water collection, dust reduction and the relocation of coral further offshore from the plant.

Shell has inked several multimillion dollar contracts over the years to supply solar panels and power to tens of thousands of households across China’s western regions. Now it is making its first foray into the wind energy market. Although project details have not yet been released, Shell is reportedly in talks with a large Chinese company to develop two to three wind farms across the country.

Small companies scared?

Although large Dutch companies like Shell and DHV are heavily engaged in China’s economy, the Netherlands Guangzhou Chamber of Commerce Vice President Cornelius Bakker is dismayed by what he sees as a reluctance by smaller Dutch firms hoping to break into the China market.

“What we see are large Dutch companies investing heavily while smaller firms are lagging far behind,” Bakker said. “Although our amount of investment in China is on par with other EU nations, it’s very small compared to Dutch investment in other nations.”

According to Bakker, the main reason is fear, often drummed up by consultants hoping to garner large fees.

“Amongst smaller Dutch firms, there’s such a lack of understanding,” he said. “They’re worried about how to get money out of the country; they’re worried about having to take on Chinese partners. Consultants keep telling them how difficult it is to do business in China. It’s not difficult. You pay your taxes, you get your license and that’s it.”

Despite these problems, though, Bakker remains optimistic. This year, Dutch-Chinese celebrated their 35-year anniversary of diplomatic relations and there are already some 70 Dutch offices set up in south China. The Netherlands is the second largest EU investor in China after Germany, and trade ties are set to strengthen in agriculture, education and wastewater management.

“It takes time to get comfortable with nations that you may not really understand. Once [smaller] Dutch companies get more familiar with China, it will become easier and there should be more movement on both sides,” Bakker said.

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